Wednesday, July 26, 2017

Industry contemplates possible condo law

A draft condominium law in parliament might allow foreigners to buy condominiums, developers say.  (Stuart Deed / The Myanmar Times)A draft condominium law in parliament might allow foreigners to buy condominiums, developers say.  (Stuart Deed / The Myanmar Times)

A condominium law recently introduced into the Pyithu Hluttaw could open the door for foreigners to buy apartments in Myanmar, although details about the proposed legislation remain vague.

Representative for Maungdaw township, Rakhine State, U Aung Zaw Win, who is also chairman of Shine Construction – one of Myanmar’s biggest construction firms, asked when a condominium law would be established. The bill includes provisions related to construction, ownership, quality control and other related sectors.

Developers said the law has the potential to benefit the industry by mitigating disputes – and allowing more people to legally buy apartments.

U Ko Ko Lay, the general manager of Three Friends Construction in Mingalar Taung Nyunt township, said he welcomes the proposed law.

“I would welcome a condo law, which could solve a lot of the disputes that we face,” he said. “The most important thing is that it could strengthen ownership and limit disputes between developers and Yangon City Development Committee (YCDC),” he said.

However, he worried that the law might allow foreign buyers to launder their money and could lead to price escalations for available stock.

“We should carefully consider this law because the economic situation is different to how it was in the past. And the condominium market has boomed several times before without any foreign buyers,” he said.

“But we can’t really predict what will happen if foreigners are allowed to buy,” he said, adding that the law might reduce number of foreigners staying in hotels

“As far as I can see, a condominium law would bring mostly benefits, although if there is not an increase in supply then prices could also increase sharply,” he said.

U Min Lwin, the managing director of Danahlaing Construction in Sanchaung township, said a condominium law would empower apartment owners.

“There are many cases where residents must fight with the landowner or developer – and I hope that a law would provide people with protection in disputes,” he said.

“I think it would solve a lot of problems,” said U Min Lwin.

He said if the law was balanced it would provide more power for apartment owners.

“Every condo project sees arguments between the developer, the landowner and the tenants and I hope the law can address this by establishing the rights of all parties,” he said.

He added that a condo law could possibly remove the need for residents to form housing development committees, such as the one formed by Pearl Condominium residents, to fight the developer as a group. He added that Danahlaing Condo has faced similar problems between residents and the landowner regarding maintenance and service fees in the past.

Weekly Eleven journal reported on November 6 that foreigners would only be allowed to buy in condo buildings at least six stories high.

U Min Lwin said he doubted that allowing foreigners to buy apartments would distort the market.

“There’s no way that sales can be damaged if foreigners are allowed to buy – sales must surely increase demand, although this might push prices upward well,” he said.

“I think this will also make developers provide better facilities and lift quality standards,” U Min Lwin said.

Ko Soe Wunna, the manager of Shining Star real estate agency in Ahlone township, said the proposed condo law included restrictions that limiting foreign ownership of apartments only above the sixth floor but was hopeful that it would be beneficial for the industry.

“I don’t see restrictions as being a major problem because this is a draft law and we can’t say too much more until the law is enacted,” he said.

“But I think it’s clear that the law would provide some protection to apartment owners, which will probably lift prices as well,” he added.

However, he said the fewer restrictions were included in the bill, the better it would be – with one exception. “I don’t believe that foreigners and Myanmar citizens have the same opportunities, so I would like to see restrictions placed on foreign ownership.”